The idea of an interpretive statement from the commission, initially requested by Equality Michigan last year, was revived after the 6th Circuit Court of Appeals ruled in favor of a transgender woman who said she was illegally fired by a funeral home in Garden City while transitioning from male to female . . .

Regular readers of our blog will be familiar with this particular legal issue, as we have previously discussed the question of whether bans on sex discrimination necessarily also ban discrimination on the basis of sexual orientation and/or gender identity in the context of federal law. This legal question is a hot topic in employment litigation in federal courts across the country. Because of widely divergent outcomes in federal district and circuit courts across the country in addressing this question, we will likely have to wait until the U.S. Supreme Court weighs in to have a definitive interpretation of federal law.

Irrespective of the federal question, however, there appears to be a trend toward states considering this issue in the context of their own non-discrimination laws. The Michigan Civil Rights Commission’s decision is similar to proposed guidance announced by the Pennsylvania Human Relations Commission from late 2017. This development is important because a Supreme Court decision on this issue under federal law may not necessarily prove binding on states’ interpretations of state law.

We will, of course, continue to monitor this issue as it develops around the country.

The Pennsylvania Human Relations Commission (“PHRC”), which enforces Pennsylvania’s state law prohibiting discrimination, has made a bit of splash in 2017. How, you ask? Well – that requires a bit of explanation.

One of the hottest topics of debate in employment law in the past few years relates to legal protections for LGBTQ employees. While some states and municipalities expressly prohibit discrimination on the basis of sexual orientation and gender identity, this isn’t the case everywhere. Indeed, only 20 states and the District of Columbia protect these characteristics in all employment. That leaves 30 states that lack comprehensive state law protections for sexual orientation and gender identity in employment, including 17 states who have zero express protections at all. Similarly, Title VII of the Civil Rights Act of 1964, which establishes protected characteristics and prohibits employment discrimination based on those characteristics, does not expressly cover sexual orientation or gender identity — despite a long history of Congressional efforts to amend Title VII to do so.

Nevertheless, both state and federal law prohibit employment discrimination on the basis of an employee’s sex. Regular readers of our humble blog will recall a growing trend from courts around the country holding that sexual orientation/gender identity discrimination constitutes sex discrimination as a matter of law. Moreover, the EEOC has adopted this position and taken enforcement action accordingly. The EEOC has argued that sexual orientation discrimination is sex discrimination under three separate legal theories: (1) a traditional “but-for” analysis, (2) an associational discrimination analysis, and (3) a sex stereotyping analysis. You can read at greater length about these three theories here.

The PHRC’s proposed guidance focuses on the third of these: sex stereotyping. This argument proceeds roughly as follows: (1) sex discrimination in employment is prohibited; (2) sex discrimination includes discriminating against employees because they fail to align with stereotypical male or female appearance, mannerisms, behaviors, etc.; (3) the “default” assumption that an employee is or should be heterosexual and cisgender represents one of the preeminent kinds of sex stereotypes; and therefore, (4) discrimination on the basis of an employee’s sexual orientation or gender identity is impermissible sex stereotyping that constitutes sex discrimination as a matter of law. While the nuances of this argument tend to vary with the facts of each individual case, this outline provides a 30,000 foot view of the sex stereotyping theory.

In late April 2017, the PHRC issued proposed guidance stating it would investigate complaints of discrimination by LGBTQ individuals, including claims of employment discrimination, as prohibit sex stereotyping. Specifically, the proposed PHRC guidance states as follows:

The gist of these claims is that LGBTQ individuals do not comply with sexual stereotypes and that adverse action(s) against an LGBTQ individual due to that person’s failure to comply with sexual stereotypes amounts to discrimination based on sex. Accordingly, it is the position of the Pennsylvania Human Relations Commission that it will take and investigate sex stereotyping claims filed by LGBTQ individuals.

The PHRC has received extensive public comment on this proposal, and it is expected that the Commissioners will review the public comments at their November commission meeting. Pending further action by the commission, this guidance remains proposed guidance. Nevertheless, the PHRC’s action reveals a growing enforcement trend in this area of law. Stay tuned for the PHRC’s final decision regarding what, if any, guidance on this topic it will issue.

Recently, the United States Court of Appeals for the Seventh Circuit issued an opinion with significant employment law implications. As you might recall, a panel of the Seventh Circuit issued a split 2-1 decision a few months ago, holding that Title VII’s prohibitions against sex discrimination in employment did not extend to protect employees on the basis of their sexual orientation. The full Seventh Circuit then heard oral argument about whether the panel decision was correctly decided in the case, Hively v. Ivy Tech Community College.

Last week, the Seventh Circuit sitting en bancreversed the panel’s decision, holding that Title VII’s provisions that prohibit discrimination in employment on the basis of sex necessarily also prohibit employment discrimination on the basis of sexual orientation. This decision is a binding interpretation of federal law for employers with employees within the Seventh Circuit, which includes Illinois, Indiana, and Wisconsin. This decision means that employers in those states should immediately review their policies, procedures, and training regimens to ensure compliance. However, employers outside of those states aren’t necessarily “off the hook” and should strongly consider reviewing their own policies in light of this decision.

To learn more about what this decision could mean for your workplace, check out our recent Labor & Employment Alert on the case.

The EEOC’s SEP describes the areas that will be a priority focus for its enforcement efforts over a particular period of time. In some instances, it describes a particular component of the employment relationship (for example, the application process) that it will scrutinize more. In other instances, it describes a particular basis of discrimination that it will focus on (for example, employees who are or are perceived to be Muslim, or LGBT employees). Ultimately, the SEP is best understood as a kind of statement of intent–i.e., where the EEOC will focus resources in the coming years.

What Isn’t a Strategic Enforcement Plan?

The EEOC’s SEP is not a statement of exclusion. That is, just because a specific workplace issue or protected characteristic is omitted (or not emphasized) within the SEP doesn’t mean the EEOC will ignore that particular issue or characteristic. Employers should expect that the EEOC will continue to enforce all of the relevant discrimination laws on the books. The SEP merely acts as a guide for the EEOC to focus its enforcement efforts.

What Will the EEOC’s Priorities Be Under the Updated Strategic Enforcement Plan?

The EEOC’s SEP has identified six national priority areas for enforcement in FY 2017-2021:

1. Eliminating Recruitment/Hiring Barriers. Moving forward, the EEOC will put additional emphasis on recruitment and hiring. This includes exclusionary policies and practices. In addition, the EEOC has noted it will focus on job channeling/steering and job segregation; restrictive applications; pre-employment tests/screenings and background checks that affect African-American and Latino employees; date-of-birth inquiries that affect older employees, and medical questions that affect people with disabilities. On the issue of restrictive applications, the EEOC has also highlighted online application systems that are inaccessible to applicants with disabilities.

2. Protecting Vulnerable Workers and Underserved Communities. Evaluating local issues and concerns, the EEOC’s district offices will identify particular vulnerable workers and underserved communities for enforcement attention. As an example, the EEOC notes that some offices may target discrimination against Native American employees for increased focus.

4. Equal Pay. The EEOC will continue its efforts to address sex-based pay discrimination under Title VII and the Equal Pay Act and will also focus on pay practices that discriminate on any protected basis. In particular, the EEOC has noted pay discrimination on the basis of race, ethnicity, age, and disability remains an issue that it intends to continue targeting.

5. Preserving Access to the Legal System. The focus here will be on employer policies or practices that it perceives as limiting employee rights, discouraging employees from exercising their rights, or impeding the EEOC’s efforts. In addition to retaliation, the EEOC has indicated it will focus on overly broad waivers/releases, certain mandatory arbitration agreements, and employer failure to retain required applicant/employee data.

6. Preventing Systemic Harassment. The EEOC notes that over 30% of charges allege harassment (and that “the most frequent bases alleged are sex, race disability, age, national origin and religion, in order of frequency”). The EEOC has stated it will seek to promote “holistic prevention programs” that it believes will serve as a deterrent to violations.

Of course, this brief summary is not exhaustive; click here for the full document. Ultimately, the updated SEP is a reminder for employers to review their policies and practices as 2016 draws to a close, in order to ensure compliance.

Yesterday, the U.S. Seventh Circuit Court of Appeals affirmed a lower court ruling holding that Title VII does not prohibit employment discrimination on the basis of sexual orientation. The case involved a lesbian part-time employee, who alleged she was deprived of the opportunity for full-time employment and was not promoted due to her sexual orientation. After losing her case at the District Court level, the employee appealed to the Seventh Circuit.

The Seventh Circuit noted its hands were tied in the matter:

Since Hamner and Spearman, our circuit has, without exception, relied on those precedents to hold that the Title VII prohibition on discrimination based on ‘sex’ extends only to discrimination based on a person’s gender, and not that aimed at a person’s sexual orientation.

In affirming the decision, the court also pointed to the fact that Congress had not amended the law to include sexual orientation and the fact that the Supreme Court has not established precedent extending Title VII protections to employees on the basis of their sexual orientation.

While Title VII does not expressly include sexual orientation as a protected characteristic in its ban against employment discrimination, your faithful blog authors have discussed a number of legal theories under which LGBT employees have sought relief. We have discussed the sex stereotyping theory, i.e., the idea that an employee’s failure to conform to gender stereotypes or norms may be actionable for LGBT plaintiffs under Title VII. We have also discussed what might be called the “referential” theory, under which the EEOC has argued that sexual orientation cannot be understood as a distinct concept from sex, and that sexual orientation discrimination is therefore sex discrimination by definition.

Absent congressional action or Supreme Court guidance, employers continue to face some uncertainty as to the viability of these kinds of claims — which some courts may find persuasive. In light of this uncertainty, employers should consider doing three things:

Remember that even if not covered by Title VII, sexual orientation may be a protected characteristic in employment under state, county, local law, or executive order — depending on the jurisdiction(s) where a business operates

Proactively develop policies and procedures to prevent sexual orientation discrimination in the workplace, even in jurisdictions where it is not a protected characteristic

Continue to monitor these legal developments and discuss them with legal counsel

(Many thanks to Christina, for her gracious invitation to join the blog as a regular contributor! -Brian)

In the wake of controversy over efforts in North Carolina and other states to roll back legal protections for lesbian, gay, bisexual, and transgender (“LGBT”) people, Pennsylvania’s taking a different approach.

On April 7th, Pennsylvania Governor Tom Wolf issued Executive Order 2016-05, hailing it as an effort to combat discrimination. The Commonwealth’s Department of General Services will now require contractors and grantees to agree not to discriminate in hiring, promotion, or other labor matters, or in the award of subcontracts or supply contracts.

Specifically, contractors and grantees will be required to agree not to discriminate on the basis of race, gender, creed, color, sexual orientation, or gender identity or expression. The EO defines sexual orientation as heterosexuality, homosexuality, or bisexuality. Gender identity or expression is defined as an individual’s gender-related identity, appearance, mannerisms, expression, or other gender-related characteristics, regardless of the individual’s sex at birth.

Notably, EO 2016-05 requires agency heads to recommend to the Secretary of General Services such sanctions “as may be appropriate” for entities that fail to comply with Commonwealth contracting programs. Coupled with provisions that establish compliance, reporting, and audit systems, this EO suggests the Wolf administration intends to pursue enforcement through a broad variety of executive branch tools—with a particular eye toward addressing discrimination on the basis of sexual orientation or gender identity.

The Department of General Services will also be charged with ensuring that contractors and grantees have a written sexual harassment policy and that the contractor’s or grantee’s employees are aware of that policy. These requirements are expressly made a condition of payment or funding—heightening the urgency for contractors and grantees to review their current policies and employee training programs on non-harassment and non-discrimination.

As a result of this EO, Commonwealth contractors/grantees and potential contractors/grantees should contact knowledgeable employment counsel to ensure compliance, as the Department of General Services begins to set up enforcement efforts.

As we wrote about last week, the New York City Council passed legislation seeking to bolster the New York City Human Rights Law (NYCHRL). Although the NYCHRL was already one of the most employee friendly statutes in the nation to begin with, especially in light of the 2005 Local Civil Rights Restoration Act, the legislature decided it was time to make New York City even friendlier to bring a discrimination claim. Mayor Bill de Blasio has now signed into law several amendments (five to be exact) that push the NYCHRL further, three expanding its employment discrimination protections, one with respect to public accommodation discrimination, and one regarding housing discrimination.

Int 814-2015 amends the NYCHRL to explicitly state that any and all exceptions and exemptions found in the statute must “be construed narrowly in order to maximize deterrence of discriminatory conduct.” This new law also codifies directly into the NYCHRL three notable decisions that purportedly embody the NYCHRL’s broad protections: Bennett v. Health Management Systems, Inc., 92 A.D.3d 29 (1st Dep’t 2011); Albunio v. City of New York, 16 N.Y.3d 472 (2011); and Williams v. New York City Housing Authority, 61 A.D.3d 62 (1st Dep’t 2009). This provision is effective immediately.

Int 818-2015 modifies the NYCHRL to now allow attorneys’ fees and expert fees in an administrative proceeding before the New York City Commission on Human Rights. This mimics the attorneys’ fees that were previously available to a prevailing plaintiff in a state or federal court action. This provision is effective immediately.

Int 819-2015 repeals several NYCHRL provisions which previously interpreted and limited the reach of the law’s sexual orientation protections. This new law eliminates various exceptions and clarifications in the NYCHRL that stated, among other things, that an employer could insist an employee meet a bona fide job-related qualification based on sexual orientation, an employer was not required (or allowed) to establish affirmative action quotas based on sexual orientation, and that an employer was not subject to the law if it employed fewer than four persons or was a religious, charitable, or educational institution operated, supervised, or controlled by a religious organization. However, these prior exclusions have all been removed. This provision is effective immediately.

Int 805-2015 expands the public accommodation protections under the NYCHRL to franchises, franchisees and lessors. Moreover, this amendment states that businesses cannot deny full and equal enjoyment of all services, facilities, and/or privileges at public accommodations based on any protected characteristics. Even more striking is the expansion of the prohibitions against discriminatory advertisements. Any marketing language that indicates any individual is unwelcome, objectionable, not acceptable, undesired, or unsolicited because of such person’s actual or perceived protected characteristics, is now unlawful. This provision is effective July 26, 2016.

Finally, Int 832-2015 amends the housing discrimination provisions in the NYCHRL to now preclude owners, lessors, managing agents, and real estate agents from discriminating against victims of domestic violence, sex offenses, and/or stalking. This provision is effective July 26, 2016.

Links to the new enactments are provided above. While an expanding NYCHRL is nothing new, employers should be continually wary and ensure they are prepared to deal with New York City’s uniquely protective employment and other discrimination laws. Even one misstep may result in a discrimination claim that will be incredibly difficult to defend. Remember, at least in New York City, this includes reviewing all language in advertisements or other marketing materials that could potentially run afoul of the expanded public accommodation protections. We will of course keep you updated as these new provisions are interpreted by the courts.

As my colleague Christina Stoneburner posted yesterday and today, North Carolina recently enacted the Public Facilities Privacy & Security Act, which, among other similar state laws that continue cropping up (such as the recently vetoed religious exemption bill in Georgia), curtails protections based on Lesbian, Gay, Bisexual, and/or Transgender (LGBT) status. These proposed laws have drawn significant media attention and are likely to continue expanding and developing in the foreseeable future. However, despite these local exceptions, please remember that federal law may still apply.

The Equal Employment Opportunity Commission (EEOC) has taken an aggressive position on sexual orientation and gender identity under federal law, finding they are both protected under Title VII of the Civil Rights Act. Several federal court decisions have found the same, including for example, a recent decision by the federal district court in Arizona, which found with almost no analysis or fanfare, that a transgender prison guard is clearly entitled to protection under Title VII. Doe v. Arizona, No. CV-15-02399-PHX-DGC, 2016 WL 1089743 (D. Ariz. Mar. 21, 2016). This decision illustrates just how far Title VII jurisprudence has evolved over the past decade. Many district courts regularly hold that transgender and/or sexual orientation status is protected under federal anti-discrimination laws.

Previously such theories were not readily accepted, and even today remain debatable. Courts have had trouble in the past resolving the dissonance of Congress’ intent, which specifically excluded from the Civil Rights Act sexual orientation and gender identity as protected characteristics. Indeed, Congress has repeatedly refused to expand Title VII to list sexual orientation and gender identity as protected categories through the Employment Non-Discrimination Act (ENDA).

However, the United States Supreme Court originally opened the door for these gender identity and sexual orientation status protections in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989) and Oncale v. Sundowner Services, 523 U.S. 75 (1998). To recap, very briefly, Hopkins involved a woman who was “too aggressive” and “not feminine enough,” and was ultimately passed over for partnership. The Court found that discrimination for failing to live up to gender stereotypes was actionable. Oncale similarly found same-sex harassment, in this case men harassing other men on an oil rig, was actionable because the harassment was based on expected gender norms. Since then, the EEOC and some intermediate federal appellate courts have applied this reasoning and found that Title VII can protect transgender status and/or sexual orientation based on these gender norm theories. Macy v. Holder, App. No. 0120120821, 2012 WL 1435995 (EEOC Apr. 20, 2012); see also Glenn v. Brumby, 663. F.3d 1312 (11th Cir. 2011); Smith v. City of Salem, 378 F.3d 566 (6th Cir. 2004).

As a result, for prudent employers, the question may be moot even in states that may curtail transgender and/or sexual orientation protections. A body of federal cases protecting against gender identity and/or sexual orientation status discrimination exists and continues to develop. In addition, many state and local jurisdictions affirmatively provide such protections (e.g., California and New York). Until further guidance is provided by the Supreme Court or Congress, it would be best to assume discrimination based on these protected characteristics remains prohibited nationwide.

Things seem to be developing rapidly in North Carolina. Just yesterday morning we reported that the ACLU had filed a challenge to the Public Facilities Privacy & Security Act that was passed last week and signed by Governor McCrory. The response from the North Carolina’s Attorney General’s Office was immediate and decisive: the AG would not defend this law against the legal challenge filed by the ACLU.

The AG, Roy Cooper, in making his announcement noted that businesses all over the country had taken a strong stance against the law. New York Governor Andrew Cuomo and the cities of Seattle and San Francisco have banned all nonessential public travel to North Carolina.

The fact that the AG will not defend the law does not mean that lawmakers will not appoint a private attorney or law firm to do so. In fact, at least one Republican Senator has condemned Cooper’s refusal to defend the law.

What may be getting lost in all of the drama is what the outcome means for employers in North Carolina. In the immediate future, if the law is repealed or judicially overturned, then Charlotte’s anti-discrimination ordinance will go into effect, which may require some updates to employers’ policies and handbooks. It also means that municipalities will be free to enact other employment related laws, including increasing the minimum wage.

Just days after North Carolina lawmakers passed the controversial Public Facilities Privacy & Security Act (“Act”), the American Civil Liberties Union (“ACLU”) has filed a lawsuit challenging the law.

Although the title of the Act seems to imply that it just addresses the use of public restrooms, the law actually goes far beyond that. Opponents of the Act, say that it is a sweeping attack on the LGBT community.

North Carolina legislators passed the Act after the city of Charlotte enacted an ordinance making it illegal to discriminate against people on the basis of sexual orientation and gender identity. The Act not only states that people must use restrooms assigned to their “biological sex,” it prohibits any municipality from passing certain laws regarding employment. This means that local governments cannot pass anti-discrimination laws or laws that affect the wages of employees such as minimum wage hikes.

Many employers may like the idea of uniform state-wide consistency in the laws. However, many businesses have already publicly condemned the law. In some states, such as Georgia, corporations’ attacks on such laws have doomed them. As of today, although some businesses have blasted the law, others have publicly supported it. So far, no corporation has actually threatened to pull its business or refuse to conduct future business in the state. It is unclear whether corporate pressure, on either side, will affect the political process.

It is also questionable whether this law as drafted will be upheld. It will be interesting to see if the courts expand the Obergefell v. Hodges decision to strike down the law as being unlawful discrimination. The EEOC has been taking a very aggressive position that sexual orientation and gender identity are protected under Title VII’s prohibitions on gender discrimination. If the EEOC is right that the existing federal laws prohibit discrimination on the basis of sexual orientation and gender identity, then the Act not only implicates Title VII, it implicates Title IX since it applies to public universities. Schools found to be in violation of Title IX can lose federal funding.

Although the EEOC has been pushing the boundaries of Title VII interpretation, so far the issue of whether Title VII does in fact outlaw discrimination based on sexual orientation has not been addressed by the Supreme Court. North Carolina lawmakers may have unwittingly pushed this issue to the Supreme Court

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